FelCor Lodging Trust (FCH) 8-K Felcor Exceeds High Guidance and Increases Common Dividend

Exhibit 99.2

 

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Date of Issuance May 8, 2007

All dollar amounts shown in this report are in U.S. dollars unless otherwise noted.

This Supplemental Information is neither an offer to sell nor a solicitation to buy any securities of FelCor. Any offers to sell or solicitations to buy any securities of FelCor shall be made only by means of a prospectus.

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

TABLE OF CONTENTS

PAGE

CORPORATE DATA

About the Company 3

Board of Directors and Executive Officers 4

Equity Research Coverage 5

FINANCIAL HIGHLIGHTS

Supplemental Financial Data 6

Consolidated Statements of Operations 7

Discontinued Operations 8

Non-GAAP Financial Measures 8

Debt Summary 16

PORTFOLIO DATA

Portfolio Distribution 18

Detailed Operating Statistics by Brand 19

Detailed Operating Statistics for FelCor’s Top Markets 20

Hotel Portfolio Information 21

Capital Expenditures 21

Renovation Completion Schedule 22

Projected Renovation Program Summary 24

Non-Strategic Hotels Designated as Held for Sale 25

Unconsolidated Operations 25

Hotels Sold in 2007 25

This supplement contains registered trademarks owned or licensed by companies other than us, which may include, but are not limited to, Crowne Plaza^®, Disneyland^®, Doubletree^®, Doubletree Guest Suites^®, Embassy Suites Hotels^®, Hampton Inn^®, Hilton^®, Hilton Suites^®, Holiday Inn^®, Holiday Inn & Suites^®, Holiday Inn Express & Suites^®, Holiday Inn Select^®, Sheraton^®, Sheraton Suites^®, Walt Disney World^® and Westin^®.

With the exception of historical information, the matters discussed in this news release include “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “continue” and other similar terms and phrases, including references to assumption and forecasts of future results. Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties, and the occurrence of future events, may cause actual results to differ materially from those anticipated at the time the forward-looking statements are made. General economic conditions, operating risks associated with the hotel business, the impact of U.S. military involvement in the Middle East and elsewhere, future acts of terrorism, the impact on the travel industry of increased fuel prices and security precautions, the impact that the bankruptcy of additional major air carriers may have on our revenues and receivables, the availability of capital, the ability to effect sales of non-strategic hotels at anticipated prices, the cyclical nature of the real estate markets, our ability to continue to qualify as a Real Estate Investment Trust for federal income tax purposes and numerous other factors may affect future results, performance and achievements. Certain of these risks and uncertainties are described in greater detail in our filings with the Securities and Exchange Commission. Although we believe our current expectations to be based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that actual results will not differ materially. We undertake no obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations.

2

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

CORPORATE DATA

About the Company

In 1994, FelCor Lodging Trust Incorporated, a real estate investment trust (REIT), went public with six hotels, and a market capitalization of $120 million.  We are now the nation’s largest owner of upper upscale, all-suite hotels. At March 31, 2007, our portfolio was comprised of 83 consolidated hotels in continuing operations located in 23 states and Canada. For these hotels, the operating revenues and expenses are reflected in our consolidated statements of operations because of our majority ownership interests of the operating lessees of these hotels. We also owned 50 percent joint venture interests in five hotels whose operations were accounted for using the equity method. We owned 65 upper upscale hotels and were the largest owner of Embassy Suites Hotels and Doubletree Guest Suites hotels. We had an enterprise value of approximately $3.5 billion.

Strategy

Our long-term strategic plan is to own a diversified portfolio of high quality, upscale hotels flagged under leading brands and then increase shareholder value and return on invested capital by maximizing the use of our real estate and enhancing cash flow. We continually examine our portfolio to address issues of market supply and concentration of risk. In order to achieve our strategic objectives, we have identified three goals: Portfolio Repositioning and Debt Reduction; Internal Growth consisting of a comprehensive renovation program, redevelopment projects and a new asset management approach; and External Growth.

		Public Ratings
	Corporate	Senior Debt	Preferred Stock
Moody’s	Ba3	Ba3	B2
Standard & Poors	BB-	B+	B-

Stock Exchange Listing

Common Stock (NYSE: FCH)

$1.95 Series A Cumulative Convertible Preferred Stock (NYSE: FCHPRA)

8% Series C Cumulative Redeemable Preferred Stock (NYSE: FCHPRC)

Fiscal Year End

December 31

Number of employees

75

Corporate Headquarters

545 E. John Carpenter Frwy., Suite 1300

Irving, TX 75062

(972) 444-4900

Investor/Media Relations Contact

Stephen A. Schafer

Vice President Strategic Planning & Investor Relations

(972) 444-4912

sschafer@felcor.com

Information Request

information@felcor.com

3

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Board of Directors

Thomas J. Corcoran, Jr.

Chairman of the Board, FelCor Lodging Trust Incorporated

Melinda J. Bush, C.H.A.

Chairman and Chief Executive Officer, HRW Holdings, LLC

Robert F. Cotter

President, Kerzner International Holdings Limited

Richard S. Ellwood

Private Investor

Thomas C. Hendrick

Executive Vice President of Acquisitions and Development, Kor Group

David C. Kloeppel

Executive Vice President and Chief Financial Officer, Gaylord Entertainment Company

Charles A. Ledsinger, Jr.

Vice Chairman and Chief Executive Officer, Choice Hotels International

Robert H. Lutz, Jr.

President, RL Investments, Inc.

Robert A. Mathewson

President, RGC, Inc.

Richard A. Smith

President and Chief Executive Officer, FelCor Lodging Trust Incorporated

Executive Officers

Richard A. Smith, President and Chief Executive Officer

Michael A. DeNicola, Executive Vice President and Chief Investment Officer

Troy A. Pentecost, Executive Vice President, Director of Asset Management

Andrew J. Welch, Executive Vice President and Chief Financial Officer

Jonathan H. Yellen, Executive Vice President, General Counsel and Secretary

4

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Equity Research Coverage

Firm Analyst Telephone

Citigroup Smith Barney Joshua Attie (212) 816-1533

Deutsche Bank North America Chris Woronka (212) 250-5815

Friedman, Billings, Ramsey & Co. Gustavo Sarago (703) 469-1042

Green Street Advisors John V. Arabia (949) 640-8780

JPMorgan Harry C. Curtis (212) 622-6610

Lehman Brothers Felicia Kantor Hendrix (212) 526-5562

Merrill Lynch David W. Anders (212) 449-2739

Morgan, Keegan & Co. Napoleon Overton (901) 579-4865

Stifel, Nicolaus & Company Rod F. Petrik (410) 454-4131

UBS (US) William B. Truelove (212) 713-8825

Wachovia Securities Jeffrey J. Donnelly (617) 603-4262

5

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

FINANCIAL HIGHLIGHTS

Supplemental Financial Data

(in thousands, except per share information, ratios and percentages)

Total Enterprise Value	March 31, 2007			December 31, 2006
Common shares outstanding		62,388			62,052
Units outstanding		1,355			1,355
Combined shares and units outstanding		63,743			63,407
Common stock price at end of period	$	25.97		$	21.84
Common equity capitalization	$	1,655,406		$	1,384,809
Series A preferred stock		309,362			309,362
Series C preferred stock		169,412			169,412
Consolidated debt		1,356,760			1,369,153
Minority interest of consolidated debt		(7,434	)		(8,150	)
Pro rata share of unconsolidated debt		97,766			98,731
Cash and cash equivalents		(116,527	)		(124,179	)
Total enterprise value (TEV)	$	3,464,745		$	3,199,138
Dividends Per Share
Dividends declared:
Common stock	$	0.25		$	0.80
Series A preferred stock		0.4875			1.95
Series C preferred stock (depositary shares)		0.50			2.00
Selected Balance Sheet Data
Investment in hotels, net	$	2,088,336		$	2,044,285
Hotels held for sale		98,882			133,801
Total cash and cash equivalents		116,527			124,179
Total assets		2,587,535			2,583,249
Total debt		1,356,760			1,369,153
Total stockholders’ equity		1,019,156			1,010,931
Total stockholders equity less preferred equity		540,382			532,157
Book value per common share outstanding		8.66			8.58

.

6

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended
	March 31,
	2007			2006
Revenues:
Hotel operating revenue:
Room	$	204,323		$	207,986
Food and beverage		31,773			30,414
Other operating departments		12,445			12,980
Retail space rental and other revenue		131			27
Total revenues		248,672			251,407
Expenses:
Hotel departmental expenses:
Room		48,783			49,414
Food and beverage		24,535			23,660
Other operating departments		4,947			5,944
Other property related costs		68,557			68,857
Management and franchise fees		13,123			13,222
Taxes, insurance and lease expense		29,229			26,532
Abandoned projects		22			-
Corporate expenses		6,787			5,804
Depreciation		25,051			22,437
Total operating expenses		221,034			215,870
Operating income		27,638			35,537
Interest expense, net		(22,872	)		(30,508	)
Charge-off of deferred financing costs		-			(667	)
Income before equity in income from unconsolidated entities, minority interests and gain on sale of assets		4,766			4,362
Equity in income from unconsolidated entities		12,771			1,948
Minority interests		37			610
Gain on sale of condominiums		3,281			-
Income from continuing operations		20,855			6,920
Discontinued operations		8,307			2,932
Net income		29,162			9,852
Preferred dividends		(9,678	)		(9,678	)
Net income applicable to common stockholders	$	19,484		$	174
Basic and diluted per common share data:
Net income (loss) from continuing operations	$	0.18		$	(0.05	)
Net income	$	0.32		$	-
Basic weighted average common shares outstanding		61,374			59,660
Diluted weighted average common shares outstanding		61,762			59,660

7

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Discontinued Operations

(in thousands)

Included in discontinued operations are the results of operations of eight hotels held for sale at March 31, 2007, three hotels sold in the first quarter of 2007 and 31 hotels sold in 2006. Condensed financial information for the hotels included in discontinued operations is as follows:

	Three Months Ended March 31,
	2007			2006
Operating revenue	$	15,498		$	64,001
Operating expenses		(11,879	)		(59,246	)
Operating income		3,619			4,755
Direct interest costs, net		(25	)		(326	)
Gain (loss) on sale of hotels, net of income tax		6,031			(1,077	)
Charge-off of deferred debt costs		(119	)		-
Debt extinguishment		(782	)		-
Minority interests		(417	)		(420	)
Income from discontinued operations		8,307			2,932
Depreciation, net of minority interests		-			4,838
Minority interest in FelCor LP		182			128
Interest expense, net of minority interests		27			316
EBITDA from discontinued operations		8,516			8,214
Loss (gain) on sale of hotels, net of income tax and minority interests		(6,031	)		1,077
Charge-off of deferred debt costs		119			-
Debt extinguishment, net of minority interests		692			-
Adjusted EBITDA from discontinued operations	$	3,296		$	9,291

Non-GAAP Financial Measures

We refer in this supplement to certain “non-GAAP financial measures.” These measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel EBITDA and Hotel EBITDA margin, are measures of our financial performance that are not calculated and presented in accordance with generally accepted accounting principles (“GAAP”). The following tables reconcile each of these non-GAAP measures to the most comparable GAAP financial measure. Immediately following the reconciliations, we include a discussion of why we believe these measures are useful supplemental measures of our performance and the limitations of such measures.

8

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Non-GAAP Financial Measures (continued)

Reconciliation of Net Income to FFO and Adjusted FFO

(in thousands, except per share and unit data)

	Three Months Ended March 31,
	2007							2006
	Dollars			Shares	Per Share Amount			Dollars			Shares	Per Share Amount
Net income	$	29,162						$	9,852
Preferred dividends		(9,678	)						(9,678	)
Net income applicable to common stockholders		19,484		61,762	$	0.32			174		59,660	$	-
Depreciation, continuing operations		25,051		-		0.41			22,437		-		0.38
Depreciation, unconsolidated entities and discontinued operations		2,863		-		0.05			7,637		-		0.13
Gain on sale of hotels, net of income tax		(6,031	)	-		(0.10	)		1,077		-		0.02
Gain on sale of unconsolidated entities		(11,182	)	-		(0.18	)		-		-		-
Minority interest in FelCor LP		426		1,355		(0.02	)		8		2,663		(0.03	)
Conversion of options and unvested restricted stock		-		-		-			-		316		-
FFO		30,611		63,117		0.48			31,333		62,639		0.50
Abandoned projects		22		-		-			-	��	-		-
Debt extinguishment loss, net of minority interest		692		-		0.02			-		-		-
Charge-off of deferred financing costs		119		-		-			667		-		0.01
Adjusted FFO	$	31,444		63,117	$	0.50		$	32,000		62,639	$	0.51

9

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Non-GAAP Financial Measures (continued)

Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Same-Store EBITDA

(in thousands)

	Three Months Ended March 31,
	2007			2006
Net income	$	29,162		$	9,852
Depreciation, continuing operations		25,051			22,437
Depreciation, unconsolidated entities and discontinued operations		2,863			7,637
Minority interest in FelCor Lodging LP		426			8
Interest expense		24,118			31,295
Interest expense, unconsolidated entities and discontinued operations		1,574			1,930
Amortization expense		1,407			990
EBITDA		84,601			74,149
Gain on sale of hotels, net of income tax		(6,031	)		1,077
Gain on sale of unconsolidated entities		(11,182	)		-
Abandoned projects		22			-
Charge-off of deferred financing costs		119			667
Debt extinguishment loss, net of minority interests		692			-
Adjusted EBITDA		68,221			75,893
Adjusted EBITDA from discontinued operations		(3,296	)		(9,291	)
Gain on sale of condominiums		(3,281	)		-
Same-Store EBITDA	$	61,644		$	66,602

10

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Non-GAAP Financial Measures (continued)

Reconciliation of Adjusted EBITDA to Hotel EBITDA

(in thousands)

	Three Months Ended March 31,
	2007			2006
Adjusted EBITDA	$	68,221		$	75,893
Retail space rental and other revenue		(131	)		(27	)
Adjusted EBITDA from discontinued operations		(3,296	)		(9,291	)
Equity in income from unconsolidated subsidiaries (excluding interest and depreciation expense)		(6,404	)		(6,698	)
Minority interest in other partnerships (excluding interest and depreciation expense)		125			(151	)
Consolidated hotel lease expense		14,259			13,599
Unconsolidated taxes, insurance and lease expense		(1,703	)		(1,583	)
Interest income		(1,247	)		(789	)
Corporate expenses (excluding amortization expense)		5,380			4,814
Gain on sale of condominiums		(3,281	)		-
Hotel EBITDA	$	71,923		$	75,767

Reconciliation of Net Income to Hotel EBITDA

(in thousands)

	Three Months Ended March 31,
	2007			2006
Netincome	$	29,162		$	9,852
Discontinued operations		(8,307	)		(2,932	)
Equity in income from unconsolidated entities		(12,771	)		(1,948	)
Minority interests		(37	)		(610	)
Consolidated hotel lease expense		14,259			13,599
Unconsolidated taxes, insurance and lease expense		(1,703	)		(1,583	)
Interest expense, net		22,872			30,508
Charge-off of deferred financing costs		-			667
Corporate expenses		6,787			5,804
Depreciation		25,051			22,437
Abandoned projects		22			-
Gain on sale of condominiums		(3,281	)		-
Retail space rental and other revenue		(131	)		(27	)
Hotel EBITDA	$	71,923		$	75,767

11

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Non-GAAP Financial Measures (continued)

Hotel EBITDA and Hotel EBITDA Margin

(dollars in thousands)

	Three Months Ended March 31,
	2007			2006
Total revenue	$	248,672		$	251,407
Retail space rental and other revenue		(131	)		(27	)
Hotel operating revenue		248,541			251,380
Hotel operating expenses		(176,618	)		(175,613	)
Hotel EBITDA	$	71,923		$	75,767
Hotel EBITDA margin		28.9%			30.1%

Reconciliation of Ratio of Operating Income to Total Revenue to Hotel EBITDA Margin

	Three Months Ended March 31,
	2007		2006
Ratio of operating income to total revenue	11.2	%	14.1	%
Retail space rental and other revenue	(0.1	)	-
Unconsolidated taxes, insurance and lease expense	(0.7	)	(0.6	)
Consolidated hotel lease expense	5.7		5.4
Corporate expenses	2.7		2.3
Depreciation	10.1		8.9
Hotel EBITDA margin	28.9	%	30.1	%

Hotel Operating Expense Composition

(dollars in thousands)

	Three Months Ended March 31,
	2007			2006
Reconciliation of total operating expense to hotel operating expense:
Total operating expenses	$	221,034		$	215,870
Unconsolidated taxes, insurance and lease expense		1,703			1,583
Consolidated hotel lease expense		(14,259	)		(13,599	)
Corporate expenses		(6,787	)		(5,804	)
Abandoned projects		(22	)		-
Depreciation		(25,051	)		(22,437	)
Hotel operating expenses	$	176,618		$	175,613

12

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Non-GAAP Financial Measures (continued)

Substantially all of our non-current assets consist of real estate. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminish predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of performance, which are not measures of operating performance under GAAP, to be helpful in evaluating a real estate company’s operations. These supplemental measures, including FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel EBITDA and Hotel EBITDA margin, are not measures of operating performance under GAAP. However, we consider these non-GAAP measures to be supplemental measures of a hotel REIT’s performance and should be considered along with, but not as an alternative to, net income as a measure of our operating performance.

FFO and EBITDA

The White Paper on Funds From Operations approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), defines FFO as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis.  We compute FFO in accordance with standards established by NAREIT.

This may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do.

EBITDA is a commonly used measure of performance in many industries. We define EBITDA as net income or loss (computed in accordance with GAAP) plus interest expenses, income taxes, depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDA on the same basis.

Adjustments to FFO and EBITDA

We adjust FFO and EBITDA when evaluating our performance because management believes that the exclusion of certain additional recurring and non-recurring items such as those described below provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted FFO, Adjusted EBITDA and Same-Store EBITDA, when combined with GAAP net income, EBITDA and FFO, is beneficial to an investor’s better understanding of our operating performance.

• Gains and losses related to early extinguishment of debt and interest rate swaps – We exclude gains and losses related to early extinguishment of debt and interest rate swaps from FFO and EBITDA because we believe that it is not indicative of ongoing operating performance of our hotel assets. This also represents an acceleration of interest expense or a reduction of interest expense, and interest expense is excluded from EBITDA.

13

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Non-GAAP Financial Measures (continued)

• Impairment losses – We exclude the effect of impairment losses in computing Adjusted FFO and Adjusted EBITDA because we believe that including these is not consistent with reflecting the ongoing performance of our remaining assets. Additionally, we believe that impairment charges represent accelerated depreciation and depreciation is excluded from FFO by the NAREIT definition and from EBITDA.

• Cumulative effect of a change in accounting principle – Infrequently, the Financial Accounting Standards Board promulgates new accounting standards that require the consolidated statements of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments in computing Adjusted FFO and Adjusted EBITDA because they do not reflect our actual performance for that period.

In addition, to derive Adjusted EBITDA, we adjust EBITDA for gains or losses on the sale of assets because we believe that including them in EBITDA is not consistent with reflecting ongoing performance of our remaining assets. Additionally, the gain or loss on sale of depreciable assets represents either accelerated depreciation or excess depreciation in previous periods, and depreciation is excluded from EBITDA.

To derive Same-Store EBITDA, we make the same adjustments to EBITDA as for Adjusted EBITDA and, additionally, exclude EBITDA from discontinued operations and gains and losses from the disposition of non-hotel related assets.

Hotel EBITDA and Hotel EBITDA Margin

Hotel EBITDA and Hotel EBITDA margin are commonly used measures of performance in the industry and give investors a more complete understanding of the operating results over which our individual hotels and operating managers have direct control. We believe that Hotel EBITDA and Hotel EBITDA margin are useful to investors by providing greater transparency with respect to two significant measures used by us in our financial and operational decision-making. Additionally, these measures facilitate comparisons with other hotel REITs and hotel owners. We present Hotel EBITDA and Hotel EBITDA margin by eliminating corporate-level expenses, depreciation and expenses related to our capital structure. We eliminate corporate-level costs and expenses because we believe property-level results provide investors with supplemental information with respect to the ongoing operating performance of our hotels and the effectiveness of management on a property-level basis. We eliminate depreciation and amortization, even though they are property-level expenses, because we do not believe that these non-cash expenses, which are based on historical cost accounting for real estate assets and implicitly assume that the value of real estate assets diminish predictably over time, accurately reflect an adjustment in the value of our assets. We also eliminate consolidated percentage rent paid to unconsolidated entities, which is effectively eliminated by minority interest expense and equity in income from unconsolidated subsidiaries, and include the cost of unconsolidated taxes, insurance and lease expense, to reflect the entire operating costs applicable to our hotels.

14

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Non-GAAP Financial Measures (continued)

Limitations of Non-GAAP Measures

The use of these non-GAAP financial measures has certain limitations. FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel EBITDA and Hotel EBITDA margin, as presented by us, may not be comparable to FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel EBITDA and Hotel EBITDA margin as calculated by other real estate companies. These measures do not reflect certain expenses that we incurred and will incur, such as depreciation and interest or capital expenditures. Management compensates for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the GAAP financial measures, and our consolidated statements of operations and cash flows, include interest expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures.

These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by GAAP. Neither should FFO, FFO per share, Adjusted FFO, Adjusted FFO per share, EBITDA, Adjusted EBITDA or Same-Store EBITDA be considered as measures of our liquidity or indicative of funds available for our cash needs, including our ability to make cash distributions. FFO per share does not measure, and should not be used as a measure of, amounts that accrue directly to the benefit of stockholders. FFO, Adjusted FFO, EBITDA, Adjusted EBITDA, Same-Store EBITDA, Hotel EBITDA and Hotel EBITDA margin reflect additional ways of viewing our operations that we believe when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.

15

FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Debt Summary

(dollars in thousands)

Debt Outstanding

		EncumberedHotels			Interest Rate at March 31, 2007		Final Maturity	Consolidated Debt
Line of credit(a)	none			L + 1.75		January 2009		$	-
Senior term notes	none			8.50		June 2011			298,974
Senior term notes	none			L + 1.875		December 2011			215,000
Total line of credit and senior debt									513,974
Mortgage debt(b)	12 hotels			L + 0.93		November 2011			250,000
Mortgage debt	7 hotels			6.57		June 2009 – 2014			90,452
Mortgage debt	7 hotels			7.32		March 2009			123,427
Mortgage debt	8 hotels			8.70		May 2010			168,552
Mortgage debt	6 hotels			8.73		May 2010			121,850
Mortgage debt	1 hotel			L + 2.85		August 2008			15,500
Mortgage debt	1 hotel			5.81		July 2016			12,745
Other	1 hotel			9.17		August 2011			4,256
Construction loan(c)			-	L + 2.00		October 2007			56,004
Total mortgage debt			43 hotels						842,786
								$	1,356,760

(a) We have a borrowing capacity of $125 million on our line of credit. The interest on this line can range from 175 to 225 basis points over LIBOR based on our leverage ratio as defined in our line of credit agreement.

(b) This includes three, one-year extension options extending the maturity of this debt from 2008 to 2011.

(c) We have a recourse construction loan facility for the development of a 184-unit condominium project in Myrtle Beach, South Carolina.  This loan was repaid in full May 1, 2007.

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FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Debt Summary (continued)

Debt Statistics at March 31, 2007

Weighted average interest	7.61%
Fixed interest rate debt to total debt	60.5%
Weighted average maturity of debt	5 years
Mortgage debt to total assets	32.6%

At March 31, 2007, future scheduled principal payments on outstanding debt are as follows

(in thousands):

Year		Secured Debt		Unsecured Debt			Total
2007	$	65,579	$	-		$	65,579
2008		29,233		-			29,233
2009		142,240		-			142,240
2010		274,497		-			274,497
2011(a)		253,030		515,000			768,030
2012 and thereafter		78,207		-			78,207
Discount		-		(1,026	)		(1,026	)
Total debt	$	842,786	$	513,974		$	1,356,760

(a) Included in this amount is a $250,000 loan that has three, one-year extension options extending the maturity of this debt from 2008 to 2011.

At March 31, 2007, we had unconsolidated 50 percent investments in ventures that owned an aggregate of 18 hotels. These ventures had approximately $196 million of non-recourse mortgage debt, all of which is secured by hotel assets. Our pro rata share of this non-recourse debt was $98 million.

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FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

PORTFOLIO DATA

Portfolio Distribution at March 31, 2007

(83 consolidated hotels included in continuing operations, same store basis)

Brand	Hotels	Rooms	% of Total Rooms	% of 2006 HotelEBITDA
Embassy Suites Hotels	47	12,130	51	57
Holiday Inn-branded	17	6,301	26	18
Starwood-branded	9	3,217	13	15
Doubletree-branded	7	1,471	6	7
Hilton-branded	2	559	2	2
Other	1	403	2	1
Top Markets
South Florida area	5	1,434	6	7
Atlanta	5	1,462	6	7
San Francisco Bay area	6	2,141	9	6
Los Angeles area	4	898	4	5
Orlando	5	1,690	7	5
Dallas	4	1,333	6	5
Phoenix	3	798	3	4
San Diego	1	600	2	4
Minneapolis	3	739	3	4
Northern New Jersey	3	756	3	3
Washington, D.C.	1	443	2	3
Philadelphia	2	729	3	3
Chicago	3	795	3	3
San Antonio	3	874	4	3
Boston	2	532	2	3
Location
Suburban	32	8,200	34	37
Urban	20	6,361	26	25
Airport	20	6,203	26	24
Resort	11	3,317	14	14
Segment
Upper-upscale	65	17,377	72	81
Full service	17	6,301	26	18
Upscale	1	403	2	1

(a) Hotel EBITDA is more fully described on page 14 of this supplement.

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FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Detailed Operating Statistics by Brand^(a)

(83 consolidated hotels included in continuing operations, same store basis)

	Occupancy (%)
	Three Months Ended March 31,
	2007	2006	%Variance
Embassy Suites Hotels	72.5	76.5	(5.3	)
Holiday Inn-branded hotels	63.4	70.5	(10.1	)
Starwood-branded hotels(a)	68.8	71.0	(3.2	)
Doubletree-branded hotels	71.7	74.4	(3.7	)
Other hotels(b)	53.9	61.0	(11.6	)
Total hotels	68.8	73.5	(6.3	)
	ADR ($)
	Three Months Ended March 31,
	2007	2006	%Variance
Embassy Suites Hotels	148.43	137.62	7.9
Holiday Inn-branded hotels	112.82	106.37	6.1
Starwood-branded hotels(a)	131.69	123.26	6.8
Doubletree-branded hotels	149.54	133.69	11.9
Other hotels(b)	126.96	118.80	6.9
Total hotels	137.01	127.05	7.8
	RevPAR ($)
	Three Months Ended March 31,
	2007	2006	%Variance
Embassy Suites Hotels	107.55	105.27	2.2
Holiday Inn-branded hotels	71.54	75.02	(4.6	)
Starwood-branded hotels(a)	90.56	87.56	3.4
Doubletree-branded hotels	107.18	99.50	7.7
Other hotels(b)	68.47	72.48	(5.5	)
Total hotels	94.28	93.33	1.0

(a) Starwood-branded hotels include eight Sheraton-branded hotels and one Westin hotel.

(b) Other hotels include two Hilton-branded hotels and one Crowne Plaza hotel.

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FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Detailed Operating Statistics for FelCor’s Top Markets

(83 consolidated hotels included in continuing operations, same store basis)

	Occupancy (%)
	Three Months Ended March 31,
	2007	2006	%Variance
South Florida area	86.8	88.6	(2.0	)
Atlanta	74.5	80.0	(7.0	)
San Francisco Bay area	66.8	72.3	(7.7	)
Los Angeles area	77.5	78.0	(0.6	)
Orlando	79.2	79.7	(0.6	)
Dallas	70.4	74.5	(5.4	)
Phoenix	81.9	83.3	(1.6	)
San Diego	78.5	82.1	(4.4	)
Minneapolis	69.1	65.7	5.2
Northern New Jersey	59.8	65.8	(9.1	)
Washington, D.C.	62.7	61.8	1.4
Philadelphia	55.8	59.8	(6.6	)
Chicago	60.0	67.6	(11.3	)
San Antonio	71.9	78.2	(8.1	)
Boston	51.9	65.6	(20.9	)
	ADR ($)
	Three Months Ended March 31,
	2007	2006	%Variance
South Florida area	198.07	181.50	9.1
Atlanta	125.34	120.13	4.3
San Francisco Bay area	131.09	121.58	7.8
Los Angeles area	150.64	132.45	13.7
Orlando	122.71	112.64	8.9
Dallas	130.64	116.12	12.5
Phoenix	180.43	160.65	12.3
San Diego	152.53	135.86	12.3
Minneapolis	139.03	132.37	5.0
Northern New Jersey	152.06	146.23	4.0
Washington, D.C.	172.96	164.94	4.9
Philadelphia	122.85	115.24	6.6
Chicago	122.42	113.47	7.9
San Antonio	109.50	98.68	11.0
Boston	140.39	133.53	5.1
	RevPAR ($)
	Three Months Ended March 31,
	2007	2006	%Variance
South Florida area	171.95	160.77	7.0
Atlanta	93.32	96.14	(2.9	)
San Francisco Bay area	87.51	87.96	(0.5	)
Los Angeles area	116.81	103.31	13.1
Orlando	97.17	89.75	8.3
Dallas	92.01	86.46	6.4
Phoenix	147.85	133.77	10.5
San Diego	119.68	111.56	7.3
Minneapolis	96.13	87.00	10.5
Northern New Jersey	90.95	96.27	(5.5	)
Washington, D.C.	108.36	101.94	6.3
Philadelphia	68.60	68.90	(0.4	)
Chicago	73.46	76.76	(4.3	)
San Antonio	78.71	77.14	2.0
Boston	72.87	87.62	(16.8	)

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FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Hotel Portfolio Information

Pro Rata Share of Rooms Owned

	Hotels	Room Countat March31,2007
Consolidated hotels in continuing operations	83		24,081
Unconsolidated hotel operations	5		761
Total hotels	88		24,842
50% joint ventures	18		(2,089	)
60% joint ventures	1		(214	)
75% joint ventures	1		(55	)
90% joint ventures	3		(68	)
97% joint venture	1		(11	)
Total owned rooms by joint venture partners			(2,437	)
Pro rata share of rooms owned			22,405

Capital Expenditures (dollars in thousands)

	Three Months Ended March 31,
	2007			2006
Improvements and additions to consolidated hotels	$	66,903		$	34,847
Joint venture partners’ pro rata share of additions to hotels		(1,238	)		(250	)
Pro rata share of unconsolidated additions to hotels		3,693			4,227
Total additions to hotels(1)	$	69,358		$	38,824

(1) Includes capitalized interest, property taxes, ground leases and certain employee costs.

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FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Hotel Portfolio Information (continued)

Hotel Renovation Status at April 30, 2007

	Rooms	% Owned(a)
Completed2006
Charleston (Mills House - Historic Downtown), SC - Holiday Inn(b)	214
Dana Point (Doheny Beach), CA - Doubletree Guest Suites	195
Minneapolis (Airport), MN - Embassy Suites(b)	310
Napa Valley, CA - Embassy Suites(b)	205
Nashville (Airport/Opryland Area), TN - Embassy Suites	296
Nashville (Opryland/Airport-Briley Parkway), TN - Holiday Inn Select	382
Piscataway (Somerset), NJ - Embassy Suites(b)	221
Vienna (Tysons Corner), VA - Sheraton(b)	443	50%
Completed 2007
Atlanta (Airport), GA - Embassy Suites(b)	232
Atlanta (Galleria), GA - Sheraton Suites(b)	278
Austin, TX - Doubletree Guest Suites(b)	189	90%
Baltimore (BWI Airport), MD - Embassy Suites(b)	251	90%
Baton Rouge, LA - Embassy Suites(b)	223
Charlotte (Southpark), NC - Doubletree Guest Suites	208
Chicago (Northshore/Deerfield-Northbrook), IL - Embassy Suites(b)	237
Houston (Medical Center), TX - Holiday Inn & Suites	284
Lexington (Lexington Green), KY - Hilton Suites(b)	174
Orlando (International Airport), FL - Holiday Inn Select(b)	288
Orlando (Walt Disney World Resort), FL - Doubletree Guest Suites	229
Parsippany, NJ - Embassy Suites(b)	274	50%
Pittsburgh (At University Center-Oakland), PA - Holiday Inn Select(b)	251
San Antonio (International Airport), TX - Holiday Inn Select(b)	397
San Francisco (Airport/Burlingame), CA - Embassy Suites	340
San Francisco (Fisherman's Wharf), CA - Holiday Inn	585
San Francisco (Airport/South San Francisco), CA - Embassy Suites(b)	312
Secaucus (Meadowlands), NJ - Embassy Suites(b)	261	50%
St. Paul (Downtown), MN - Embassy Suites(b)	210
Toronto (Airport), CAN - Holiday Inn Select	445
Toronto (Yorkdale), CAN - Holiday Inn	370

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FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Hotel Portfolio Information (continued)

Projected Renovation Completion Schedule for Remaining Hotels

	Rooms	% Owned(a)
Second Quarter 2007
Atlanta (Gateway-Atlanta Airport), GA - Sheraton	395
Boston (Beacon Hill), MA - Holiday Inn Select	303
Boston (Marlborough), MA – Embassy Suites(b)	229
Chicago (Lombard/Oak Brook), IL - Embassy Suites(b)	262	50%
Chicago (O'Hare Airport), IL - Sheraton Suites(b)	296
Dallas (Market Center), TX – Embassy Suites	244
Milpitas (Silicon Valley), CA - Embassy Suites(b)	266
Philadelphia (Historic District), PA - Holiday Inn	364
Philadelphia (Society Hill), PA - Sheraton(b)	365
Raleigh (Raleigh/Durham), NC - Doubletree Guest Suites(b)	203
San Rafael (Marin County Conference Center), CA - Embassy Suites(b)	235	50%
Santa Barbara (Goleta), CA - Holiday Inn	160
Tampa (On Tampa Bay), FL - Doubletree Guest Suites(b)	203
Wilmington, DE - Doubletree(b)	244	90%
Third Quarter 2007
Birmingham, AL - Embassy Suites(b)	242
Boca Raton, FL - Embassy Suites(b)	263
Burlington (Hotel & Conference Center), VT - Sheraton(b)	309
Dallas (DFW International Airport-South), TX - Embassy Suites(b)	305
Dallas (Love Field), TX - Embassy Suites(b)	248
Indianapolis (North), IN - Embassy Suites(b)	221	75%
Jacksonville (Baymeadows), FL - Embassy Suites(b)	277
Kansas City (Plaza), MO - Embassy Suites(b)	266	50%
Miami (International Airport), FL - Embassy Suites(b)	316
Orlando (International Drive/Convention Center), FL - Embassy Suites(b)	244
Orlando (Altamonte Springs), FL - Embassy Suites	277
Phoenix (Biltmore), AZ - Embassy Suites(b)	232
Phoenix (Tempe), AZ - Embassy Suites(b)	224
Raleigh (Crabtree), NC - Embassy Suites(b)	225	50%
San Diego (On the Bay), CA - Holiday Inn	600

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FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Hotel Portfolio Information (continued)

Projected Renovation Completion Schedule for Remaining Hotels – (continued)

	Rooms	% Owned(a)
Fourth Quarter 2007
Atlanta (Perimeter Center), GA - Embassy Suites(b)	241	50%
Austin (North), TX - Embassy Suites(b)	260	50%
Cocoa Beach (Oceanfront), FL - Holiday Inn	500
Corpus Christi, TX - Embassy Suites(b)	150
Deerfield Beach (Boca Raton/Deerfield Beach Resort), FL - Embassy Suites(b)	244
Ft. Lauderdale (Cypress Creek), FL - Sheraton Suites(b)	253
Ft. Lauderdale (17th Street), FL - Embassy Suites(b)	358
Los Angeles (Disneyland Area), CA - Embassy Suites(b)	222
Los Angeles (El Segundo-International Airport South), CA - Embassy Suites	349	97%
Orlando (International Drive Resort), FL - Holiday Inn	652
San Antonio (International Airport), TX - Embassy Suites(b)	261	50%
San Antonio (Northwest/I-10), TX - Embassy Suites(b)	216	50%
2008
Atlanta (Buckhead), GA – Embassy Suites(b)	316
Bloomington, MN - Embassy Suites(b)	219
Charlotte, NC – Embassy Suites(b)	274	50%
Dallas (Park Central), TX – Westin	536	60%
Kansas City (Overland Park), KS – Embassy Suites(b)	199	50%
Myrtle Beach (At Kingston Plantation), SC - Embassy Suites	255
Myrtle Beach Resort, SC - Hilton	385
New Orleans, LA – Embassy Suites(b)	370
New Orleans (French Quarter), LA – Holiday Inn	374
Oxnard (Mandalay Beach Resort & Conference Center), CA – Embassy Suites	248
Phoenix (Crescent Hotel), AZ – Sheraton(b)	342
San Francisco (Union Square), CA – Crowne Plaza	403
Santa Monica (Beach at the Pier), CA – Holiday Inn	132

Projected Renovation Program Summary ($ in millions)
Completion Date	Project Cost			Hotels Completed		Rooms Completed
Fourth Quarter 2006		$	43		8		2,266
First Quarter 2007			79		17		4,845
Second Quarter 2007(1)			90		18		4,962
Third Quarter 2007			90		15		4,249
Fourth Quarter 2007			57		12		3,706
2008			71		13		4,053
Total(2)		$	430		83		24,081

(1) Includes four hotels completed in April 2007.

(2) Does not include redevelopment costs and represents our prorata share of project costs.

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FelCor Lodging Trust Incorporated

Supplemental Information

Three Months Ended March 31, 2007

Hotel Portfolio Information (continued)

Projected Renovation Completion Schedule for Remaining Hotels – (continued)

	Rooms	% Owned(a)
Non-Strategic Hotels designated as Held for Sale(c)
Brunswick, GA – Embassy Suites	130
Dallas (Park Central), TX – Sheraton	438		60%
Dallas (Park Central Area), TX – Embassy Suites	279
Dallas (West End/Convention Center) TX – Hampton Inn	309
Houston (Intercontinental Airport), TX – Holiday Inn	415
Lexington, KY – Sheraton Suites	155
Troy – (North - Auburn Hills), MI – Embassy Suites (b)	251		90%
Tulsa (I-44), OK – Embassy Suites	244
Unconsolidated Operations
Hays, KS – Hampton Inn(b)	114		50%
Hays, KS – Holiday Inn(b)	191		50%
New Orleans (Chateau LeMoyne -In French Quarter), LA – Holiday Inn(b)	171		50%
Salina, KS – Holiday Inn(b)	192		50%
Salina (I-70), KS – Holiday Inn Express & Suites(b)	93		50%

(a) We own 100% of the real estate interests unless otherwise noted.

(b) This hotel is encumbered by mortgage debt or capital lease obligation.

(c) These hotels were included in discontinued operations in the accompanying consolidated statement of operations at March 31, 2007.

Hotels Sold in 2007

Property	Date Sold	Rooms	Total Gross Sales Price Per Quarter (in millions)
Hotels sold during the quarter ended March 31, 2007:
Los Angeles (Covina/I-10), CA – Embassy Suites(a)	Feb 2007	155
Palm Desert (Palm Desert Resort) CA – Embassy Suites	Feb 2007	202
Stamford, CT – Holiday Inn Select	March 2007	198
		555		$64.7

(a) This hotel was sold by one of our 50% owned unconsolidated joint ventures for gross proceeds of $22.0 million.

25